Instead it will go under creditor protection like Condor has since TC went under. Its a unique contruct in German insolvency law. Basically an administrator will have to be consulted for each major decision.

Ofcourse, as discussed before, the 1.8 bn € stuck in refunds will be parked till LH is out of creditor protection.

Lufthansa Wins Shareholder Backing for $10 Billion Bailout Deal

Thursday, June 25, 2020 06:14 PM By William Wilkes and Richard Weiss

• Vote unlocks lifeline backed by sale of 20% stake to Germany
• Airline now faces deep restructuring to survive coronavirus

(Bloomberg) --Deutsch Lufthansa AG won shareholder approval for a 9 billion-euro ($10 billion) bailout from the German government, securing the survival of Europe�s largest airline after weeks of drama over the rescue package.

Over two-thirds of the airline�s shareholders at a special meeting on Thursday voted to approve the plan, according to Chairman Karl-Ludwig Kley.

The bailout, which features the sale of a heavily discounted 20% stake to Chancellor Angela Merkel�s government, hung in the balance until Lufthansa�s biggest shareholder, billionaire Heinz Hermann Thiele, publicly backed it hours before the crunch vote.

Lufthansa plans to execute the sale of shares to Germany for 2.56 euros apiece, about one third of the current market price, in the coming days to unlock the financing. The airline had warned that insolvency threatened soon if the package wasn�t cleared at the online meeting.

Another step forward came earlier Thursday, when European Union regulator approved the bulk of the package in exchange for Lufthansa making some slots available at its Frankfurt and Munich hubs.

The successful shareholder vote not only hands Lufthansa a lifeline but also saves Merkel�s government from a damaging defeat as it seeks to revive the country�s export-led economy. In the process, Germany reasserts itself into the heart of a company that was privatized with fanfare two decades ago.

Bailout Package

• 20% direct stake for about 300 million euros; stake could rise to a blocking minority of 25% plus one share in the event of a takeover
• 5.7 billion euros in so-called silent participation, part of this debt-equity instrument can be converted into a 5% holding if the government isn�t repaid and hasn�t increased its stake already
• 3 billion-euro loan backed by state development bank KfW

Even with the state aid, Lufthansa will need deep restructuring to recover from the pandemic, which all but halted travel around the world. Chief Executive Officer Carsten Spohr has predicted that the airline will face years of depressed demand. The company expects its fleet to be 100 aircraft smaller after the crisis, implying the loss of over 10,000 jobs.

Securing the bailout allows Lufthansa�s management to turn attention to negotiating concessions with the company�s powerful labor unions.

The company reached a deal late Wednesday with cabin crew that would save around 500 million euros through 2023. In return, Lufthansa pledged not to make redundancies for the duration of the coronavirus crisis. A similar deal with pilots is close, Spohr said at the meeting.

Kley said at the meeting that the bailout offers the chance to rebuild its business, saying: �We can do it.�

Yesterday was a very special day for all of us here at Lufthansa Group - perhaps a historic one. I am sure that I speak for all our 138,000 colleagues around the world when I say it was a day that we will not forget.

It is therefore important for me to contact you directly, as I am sure you have read and heard a lot about us today as well as over the past few days. Now that the proposed stabilization measures have been approved during the Deutsche Lufthansa AG Extraordinary General Meeting, our future is secured. We will continue to be there for you! And we can fully concentrate on once again meeting your wishes and expectations.

In the coming days, we will further expand our flight schedule and, starting in September, we expect to resume flights to 90 percent of all originally planned short and medium haul destinations and 70 percent of our long haul destinations, depending on the easing of travel restrictions. We are looking forward to flying you to your favorite destination again.

To give you even more freedom with future travel planning and to allow you to feel good when traveling, we continue to offer you the highest degree of flexibility when booking. Should your travel plans change, you may rebook your flight free of charge, regardless of the fare or destination. Should you wish to request a refund, simply use our online form or contact our service centers. We are doing our utmost to process reimbursement requests as quickly as possible.

To ensure your wellbeing and safety throughout your journey, we have implemented extensive hygiene and safety measures. We provide comprehensive information on the websites of our airlines on this topic as well as answers to any other questions you might have regarding travel in times of coronavirus. You may also find an overview of the various options allowing for extra peace of mind while traveling with us.

Flying for you is our passion. That is why we continue to connect people and cultures – as we have done every day since our founding.

We look forward to seeing you on board again – we look forward to be flying with you again!

Please stay healthy,







Christina Foerster
Member of the Board of Management
Customer & Corporate Responsibility

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In the coming days, we will further expand our flight schedule and, starting in September, we expect to resume flights to 90 percent of all originally planned short and medium haul destinations and 70 percent of our long haul destinations, depending on the easing of travel restrictions.
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